RIM's PlayBook Still Alive Despite Tough Market Competition

RIM's PlayBook continues to hold onto the tablet market by its fingernails, despite the deaths of other high-profile rivals such as Hewlett-Packard's TouchPad.

Research In Motion's BlackBerry-branded Playbook has won the tablet wars.

Actually, no, that statement probably deserves a little bit of adjustment: RIM s 7-inch tablet hasn't exactly put a dent in the iPad's blockbuster sales run, but nonetheless it s one of the few touch-screen devices on the market to actually survive the Apple juggernaut -- something you can't say about some other high-profile devices, including Hewlett-Packard's TouchPad.

That's not to say the PlayBook doesn't face major challenges. RIM's tablet shipped around 500,000 units in its first quarter of wide release -- a mere fraction of the number of iPads sold during the same period. (RIM's been tight-lipped about actual sales, although third-party analysts suggest they're not fantastic.) According to a July 13 posted by the blog Boy Genius Report, the company also subsidized the unit cost to carriers.

"RIM's thought process was that they hoped if they put a product in the carrier's hands that was less than full margin, it would entice the carriers," an unnamed source within RIM told BGR. "RIM isn't making any money on the PlayBook."

The PlayBook's lack of native email without an associated BlackBerry device, the source added, was an off-putting revelation to the carriers. RIM has been pushing through regular software updates to PlayBook owners, most of them incremental tweaks to performance.

Certainly the analysts seem down on RIM's chances overall. "We believe RIM has now squandered nearly every opportunity and competitive advantage it enjoyed through ineffective R&D resource management, delayed product launches and misreads of the competitive environment," Morgan Stanley analyst Ehud Gelbum wrote in a note to clients, according to a June 16 Reuters report.

Earlier in August, Sprint canceled plans to launch a 4G version of the PlayBook, although RIM passed that off as a strategic decision. "RIM has decided to prioritize and focus its 4G development resources on LTE," it wrote in a statement. "We remain excited and committed to delivering innovative and powerful 4G tablets to the U.S. market together with our carrier partners." For the moment, the PlayBook remains WiFi-only, although users can tether it to a BlackBerry device.